Estimating income equity in social health insurance system

TThe paper measures horizontal equity in health care access and utilization in Japan by estimating the coefficients for income groups in a multi-part model which distinguishes between non-users of health care, the users of inpatient and outpatient care. To account for consumer unobservable characteristics, we apply a latent class approach. We address a retransformation problem of logged health care expenditure, using generalized linear models. Our sample is the 2009 data for 4,022 adult consumers (Japan Household Panel Survey). The coefficients for income groups are insignificant both in the binary choice models for inpatient/outpatient health care use, and in the models for health care expenditure. Consumers separate into two latent classes in the generalized linear model for outpatient health care expenditure. Although the results reveal horizontal equity in health care access and utilization in Japan, horizontal inequity remains in health insurance premiums and the prevalence of catastrophic coverage.